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Some state income tax forms have a separate line item for reporting use tax. (Photo credit: brewbooks)

Think you got a great deal not paying sales tax on your online purchases last year? In most states, there’s a pesky tax called “use tax” that you are supposed to pay in lieu of sales tax if you buy stuff out of state or online--and bring it in state. Theoretically, you’re supposed to root through all your receipts and credit card statements, calculate what you owe and report it on your state income tax return.

States are ramping up efforts to get taxpayers to pay up, including designing new use tax look-up tables where you pay a safe harbor amount based on your taxable income. Most taxpayers are still looking the other way. Others, in a bizarre twist, are using the new look-up tables to pay less than they have in the past.

Yes, using the use tax look-up table can actually save you taxes, says Lynn Freer, publisher or Spidell’s California Taxletter. You can use California’s use tax look-up table for purchases of items of $1,000 or less (for pricier items you still have to calculate the tax separately). Freer has a friend who is a stamp collector who was paying in excess of $3,000 a year in use tax on his many online stamp purchases based on applying the state sales tax rate of 7.75%. But now using the look-up table, given that his income is in the $100,000 to $125,000 range, he owes just $56 in use tax this year ($88 last year). “So that’s all he’s required to pay as long as he reports it on his individual income tax return,” she marvels.

“When this provision was put in place the consensus thinking was the ‘most’ Californians would simply check the use tax table and send money, thus letting California collect lots of little amounts they would not otherwise receive,” says Claudia Hill, an enrolled agent in Cupertino, Calif. and a Forbes contributor. Yet she still found she had to “cajole” clients into agreeing to send California use tax; most chose not to pay.

California’s use tax tweaks have had limited success. In the 2011 processing year, 74,737 taxpayers paid $11.3 million in use tax, according to Board of Equalization statistics available here. The next year, with the look up tables in force, 131,226 taxpayers (less than 1% of the total 15.8 million taxpayers) paid $21.1 million in use tax. Presumably more than 1% of taxpayers actually owe the tax.

The amount owed based on income in the look up tables was lowered this year compared to tax year 2011 because of the Amazon and other online retailers had to start collecting California tax on items shipped to California as of September 15th, 2012. It will be recalculated for next year to account for the Amazon law being in effect for the full year, according to a spokesman at the California State Board of Equalization.

If those numbers sound low, consider what happened in Illinois when it added look-up tables and also declared a use tax amnesty in 2010. The amnesty covered 6 years and only 25,000 taxpayers fessed up and paid $3.9 million in taxes.

Meanwhile, brick and mortar retailers, along with the National Conference of State Legislatures and the National Governor's Association, are hoping that The Main Street Fairness Act will be part of tax reform this year. "A federal law requiring online retailers to collect existing sales taxes could help make up state revenue shortfalls," says Mark Luscombe, a research analyst with tax publisher CCH, a business. And it would make use tax collection mostly moot.

In some states -- like Minnesota -- you have to file a separate use tax return to pay up. But here are the states that make it easy to pay by including a "use tax" line on their income tax returns, according to CCH: Alabama, Arizona, California,Connecticut, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia, and Wisconsin (and the District of Columbia).